Chinese Rail-volution: How China Is Winning the West

Even in China, Guiyang is a rather obscure place, tucked away in the South West corner on the approach to the Vietnamese border. And yet it was recently decorated as the best performing Chinese city for an array of economic advances by the Milken Institute.

Guiyang is part of an emerging swathe of boom towns as Beijing’s cornerstone foreign policy, the Belt and Road infrastructure initiative, sets out to invigorate growth in neighboring countries – along with China’s own poorer border regions.

Farther west from Guiyang, Tibet is perhaps China’s most quintessential border province. Remote from Beijing and with an indigenous population that has long hankered for independence or at least greater autonomy; it helps illustrate how a rail road can change the political landscape.

As part of an attempt to bring Tibet into the fold and boost its economic climate, Beijing constructed a new rail route linking the remote mountainous province with the rest of the country. This engineering marvel covers vast distances at such high altitudes that passengers need individual oxygen supplies. During a Tibetan uprising in 2008, the railway proved its worth to Beijing as the central authorities moved troops quickly by train to ferociously quell the protests.

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here are parallels between Tibet and Xinjiang, a vast region of mountains and deserts in western China. The indigenous Uyghur population has frequently pushed for more autonomy and even independence from Beijing, only to be repeatedly and ruthlessly suppressed by the central government. In both areas, large-scale immigration by ethnic Han Chinese has steadily led to locals becoming minorities, stirring resentment toward newcomers.

Beijing’s policy of migration and mass surveillance of citizens considered suspect has been brutally effective in keeping the lid on any rebellion and achieving the Communist Party’s goal of national unity. The cost has been partial destruction of traditional Tibetan and Uyghur culture, creating a tense atmosphere between ethnic groups.

This policy is set to deepen. Beijing is pouring ever-increasing amounts of money into both Xinjiang and Tibet – building roads, rail, airports and industrial parks. The infrastructure program will lift local incomes while encouraging further migration.

Quite apart from the need to offset local conflicts, there’s a further rationale for investment in Xinjiang. This is a key plank in the Belt: the epicenter of a new trade crossroads linking China with the Central Asian nations of Kazakhstan, Tajikistan and Kyrgyzstan, as well as rail routes into Europe. Farther south in the Xinjiang province, the city of Kashgar represents a gateway to Pakistan, linked by a newly improved road, and possibly one day a rail line.

The region’s rise and government help is already attracting international attention. Volkswagen, Honeywell and Orion are among Western companies investing in the region, bridging the gap between the wealthy coastal regions and poorer western areas. In turn, Beijing hopes, ethnic minorities will forget about secession from China, though history tells us brutal repressions often come back to haunt the perpetrators.

But it’s at the other end of the line from Tibet in Chengdu that’s the real “buckle” in the Belt. In the heart of the central Sichuan region, famed for its spicy food and panda sanctuary, the new rail routes will run from here to Europe, the Middle East and central Asia.

Chengdu’s role was carved out through disaster: a devastating earthquake in 2008 resulted in widespread loss of life and the destruction of countless properties and homes. The silver lining to the catastrophe was that the city has been receiving the lion’s share of the central government’s infrastructure budget, leapfrogging nearby rivals like the sprawling industrial metropolis of Chongqing and the ancient capital of Xian. Nearly half the world’s iPads are made in Chengdu’s sprawling industrial parks.

Chengdu already boasts a continent-spanning rail link with distant Lodz in Poland and hopes its manufacturing prowess will make it the primary hub for supplying central Asia, Europe and the Middle East. There are plans for another international airport, connected by its new rail and upgraded roads.

Skeptics question whether China will ever truly recoup the vast expense of building and maintaining rail lines and infrastructure projects in sparsely populated parts of the world. Others predict that recurring political divisions with central Asian nations and between Russia and China will close borders and put an end to the government’s plans. Even so, it will take a brave nation to stand in the way of Beijing’s determination and track record of completing mega projects.

Merlin Linehan has worked in development finance within Eastern Europe and Asia, and spends much of his time investigating the risks and opportunities that are created from the ongoing expansion of Chinese businesses that invest overseas in emerging markets.